Further to CSR's announcement earlier today regarding Overseas Investment Office ("OIO") approval of Wilmar's application to acquire Sucrogen, CSR announces additional information relevant to the completion of the sale, which is expected to occur on 22 December 2010.

Proposed Capital Management

CSR proposes to return approximately A$800 million to its shareholders,(approximately 52.7 cents per share) following the completion of the sale of Sucrogen.

The return of funds will comprise a capital return and a fully–franked special dividend. The capital return would be subject to CSR shareholders’ approval.

In determining the quantum of the return of funds to shareholders, CSR’s primary objectives were to:

continue CSR’s responsible approach to its asbestos obligations;

ensure future financial flexibility for its Building Products focused business; and

provide a timely and tax effective return of surplus funds to shareholders.

CSR Chairman, Dr Ian Blackburne, said: “the sale represents a successful outcome for all CSR stakeholders. Following the A$800 million return to shareholders, CSR will have a strong balance sheet to support the growth of its Building Products business while continuing to meet its asbestos obligations. The combination of a special dividend and capital return is an equitable, timely and tax effective way to return surplus funds to our shareholders,” he said.

Further, as part of CSR’s FIRB undertakings, CSR entered into an agreement with an independent body, The Trust Company (“TTC”), pursuant to which CSR was obligated to fulfill certain requirements prior to any capital repatriation to its shareholders (excluding ordinary dividends) within the next seven years or until CSR’s aggregate estimated asbestos liability is determined to be less than A$150 million (indexed).

Those requirements included:

CSR's asbestos liabilities to be reviewed by an additional independent expert;

CSR to have an intention to retain its ‘investment grade’ credit rating following any repatriation; and

a ‘big four’ independent accounting firm to express an opinion to the CSR Board that the resolution of CSR's directors that the repatriation of capital would not materially prejudice CSR’s ability to pay its creditors (including current and reasonably foreseeable future asbestos claimants), was formed on a reasonable basis.

To comply with these requirements CSR has had Finity Consulting, an independent actuarial firm, opine that the approach taken by CSR’s experts regarding the calculation of CSR’s asbestos liabilities was reasonable and that the asbestos liability calculation had regard to all classes of creditors.

CSR has also received an opinion from an independent “Big 4” accounting firm, that the Board’s decision to resolve that the repatriation of A$800 million to shareholders would not materially prejudice CSR’s ability to pay its creditors (including current and reasonably foreseeable future asbestos claimants) was formed on a reasonable basis.

Following the A$800 million capital repatriation, CSR intends to maintain a capital structure consistent with an investment grade credit rating.

In accordance with the agreement with TTC, documentation has been provided by CSR to demonstrate that these requirements have been fulfilled in relation to the proposed special dividend and return of capital.

CSR Managing Director, Jeremy Sutcliffe, said: “The proposed return of funds will be made in accordance with the undertakings CSR has agreed as part of the FIRB approval process. CSR has also taken into account other community concerns regarding asbestos issues, including those expressed by the NSW State Government on behalf of asbestos groups. As a result, on a pro-forma basis, CSR will have net cash following receipt of the sale proceeds and payment of the proposed special dividend and capital return*. It will therefore be retaining approximately an additional A$700 million compared with the original demerger.”

Capital Structure

Assuming receipt of the Sucrogen and Asian business sale proceeds as well as the payment of the special dividend and capital return, the pro-forma balance sheet of CSR* would have net cash of over A$75 million and equity of approximately A$1.5 billion as at 30 September 2010. This net asset position includes a provision of $A441.8 million for all known claims and reasonably foreseeable future asbestos related claims.

CSR expects to provide further details of its capital management, including the proposed split of the special dividend and capital return and the proposed timing of a shareholders’ meeting in early 2011.

Assuming the proceeds from the sale of Sucrogen and the Asian business were received and the capital return and special dividend were paid on 30 September 2010

Confirmation of management changes

CSR confirms its previously announced management changes, which will come into effect as a result of the sale.

Jeremy Sutcliffe, who was appointed interim Chief Executive Officer and Managing Director for a fixed term of up to 12 months on 1 April 2010, will step down as CEO on 31 December 2010 and revert to his former role as an Independent Non-Executive Director of CSR with effect from 1 January 2011.

As previously advised, Rob Sindel, currently the CEO of CSR Building Products, will join the Board of CSR Limited on 15 December 2010 and will replace Mr Sutcliffe as CEO and Managing Director with effect from 1 January 2011.

The summary of the terms of Mr Sindel’s Executive Service Agreement will be released at the time of his commencement as CEO of CSR Ltd.

As also previously advised, Chief Financial Officer and Executive Director, Shane Gannon, will depart CSR as an Executive Director with effect from 15 December 2010. The current CFO of CSR Building Products, Greg Barnes, will replace Mr Gannon as CFO of CSR Limited with effect from the same date.